The Bank of Canada's rate hikes appear to have amplified those sentiments
More than a third (34.1%) of Canadians admitted that they regret the mortgages that they have taken on, according to polling by The Real Estate and Mortgage Institute of Canada (REMIC).
This “mortgage malaise” has come to the fore amid the Bank of Canada’s policy rate reaching a 22-year high of 5%, REMIC said in its data release.
As much as 21.8% of those surveyed said that interest rate hikes have made taking on another mortgage unaffordable, while 12.3% said that they regret being locked in at what they considered bad rates.
Around 45.2% of Canadians have resigned themselves in thinking that they won’t be able to pay off their mortgages until they reach 60 years of age, while 8.2% believe that they will be 80 or older.
“Buying a home is an exciting, emotional and adrenaline filled process,” said Joe White, president and CEO of REMIC. "Sixty to 90 days after a purchase, the homebuyer's adrenaline can turn to regret if they’ve overextended themselves and it can become a place that they sleep at and pay off forever.”
In Q1, Canadian households borrowed $16.5 billion, with $11.2 billion in mortgage debt. The household debt service ratio increased to 14.9%, StatCan reported.https://t.co/7vNCET5Z4G#mortgagenews #mortgageindustry #economy #mortgagedebt #householddebt
— Canadian Mortgage Professional Magazine (@CMPmagazine) July 24, 2023
Canadians’ trust in banks might be misplaced
The REMIC poll found that while 57% arranged their mortgages with banks, only 43.1% said that banks “maybe” hold the best mortgage rates, while a mere 10.5% said “yes”.
“Having blind faith in banks could be an expensive mistake for home buyers,” White said. “Homeowners tend to blindly and gratefully take what they are told from the bank and spend less time comparing mortgage rates than they do comparing credit cards.”
